Meredith Station Ad Rev Up 8.4% In Quarter

Meredith Corp. reported this morning that advertising revenue from its TV station division grew 8.4% in the second quarter of 2016 (its fiscal fourth quarter), rising from $130 million a year ago to $141 million. The Local Media Group, as the division is called, comprises 17 owned or operated television stations reaching 11% of U.S. households.  

For the full fiscal year, the group’s revenues increased 3% to $548 million, despite $31 million less of high-margin political advertising revenues compared to the prior year. Looking more closely at fiscal 2016 performance compared to the prior year:

• Non-political advertising revenues increased 5% to $374 million. Results were led by the addition of WALA  Mobile-Pensacola and WGGB Springfield, Mass., and strong performance from existing stations WGCL Atlanta, KMOV St. Louis and KCTV Kansas City.

• Political advertising revenues were $13 million, with Meredith generating significant revenues from stations in Nevada, Missouri and Connecticut.

• Digital advertising revenues increased 13% as a series of growth strategies continued to drive higher advertising rates across the group’s digital businesses.

• Other revenues and operating expenses increased, due primarily to growth in retransmission revenues from cable and satellite television operators and higher programming fees paid to affiliated networks.

“We delivered strong performance for an off-election year in fiscal 2016,” said Meredith Local Media Group President Paul Karpowicz. “Looking to the first half of fiscal 2017, we expect to generate significant revenue and operating profit growth, driven primarily by stronger advertising. I’m also excited about our continued strength in local news across the group, along with a new local digital audience initiative that is driving traffic to our station websites, creating new sales opportunities and generating incremental digital advertising revenues.”

Meredith Chairman-CEO Stephen M. Lacy commented: “In fiscal 2016, we delivered very strong performance, generating the highest revenue in company history and offsetting the expected cyclical drop in political advertising. We have fully integrated recent strategic acquisitions across our businesses — including television stations, national media brands and digital technology platforms — and they are meaningfully contributing to shareholder value. Additionally, we continued to execute our Total Shareholder Return strategy by raising our dividend more than 8%, and we strengthened our balance sheet by paying down $100 million of debt.

“Looking ahead to fiscal 2017, we expect to generate record full-year earnings of $3.50 to $3.80 per share,” Lacy continued. “Earnings growth is expected to be driven by a diverse range of business activities, including a robust political advertising cycle, higher retransmission contribution and strong digital advertising growth across the company.”

Meredith, which also includes a national magazine division, as a whole reported fiscal 4Q revenue of $435.8 million, up from $425.9 million in the same quarter a year ago.